Am I allowed to start with Deutsche Bank? Or do I have to defer to
the Bank of Japan’s Keystone Kops; who once again laid a giant goose
egg? Who, beyond a shadow of a doubt, proved they have not a clue what
they are doing – in dramatically accelerating the pace at which the “Land of
the Setting Sun” plunges to “second world” status, en route to becoming the
first “Western Power” to experience 21st Century hyperinflation.
Hmmm, what to do? As sadly, I could easily write entire articles on
countless other topics as well – such as the Bank of International
Settlements issuing a dire warning about the massively over leveraged Chinese
banking sector; Donald Trump’s surging popularity; Wells Fargo’s “crime of a
lifetime”; the exploding worldwide pension crisis; OPEC’s Secretary
General all but confirming “no deal” at next week’s “all-important” crude oil
producers meeting; and the U.S. national debt – and budget deficit –
expanding at the fastest rate since the 2008-09 financial crisis. And
the answer is, I’m starting with Deutsche Bank – as unquestionably, it poses
the greatest near-term risk to global political, economic, social, and
monetary stability.
To that end, on June 13th article “the
Lehman of Europe is on the verge of collapse,” I stated the following…
“In my view, the ‘powers that be’ are for some as yet unknown reason,
distancing themselves from DB – just as was the case with Lehman in the
States, as its competitors were serially deemed ‘too big to fail.’ I
mean, the rapidly growing list of lawsuits and allegations against Deutsche
Bank is utterly staggering – including its admission of manipulating Precious
Metal markets for the past 15 years; to the point that clearly, this massive
European crime center is not far from total, and irreversible,
implosion. Only this time, the ramifications would be dozens of times
uglier than Lehman, as its derivatives web is so large, it would likely
entangle every financial institution in Europe – as well as countless
non-European corporations, institutions, and sovereign governments. Not
to mention, seven years after the Lehman crisis, the global banking sector is
far less liquid, amidst the worst worldwide economic conditions since the
Great Depression. Not to mention, an unprecedented, worldwide debt
edifice nearly twice that of 2008’s level, with Central bank balance sheets
so bloated – and credibility so thin – there is no chance they could ‘bail
out’ the world again, unless they resort to outright hyperinflation.
Which unfortunately, the sad, sordid history of all fiat Ponzi schemes
guarantees.”
And that, two weeks before the IMF – incredulously, given the obviously
horrific ramifications – labeled Deutsche Bank the “most
important net contributor to (global) systemic risks!”
In other words, with each passing day it’s becoming more and more clear
that for whatever reason, Deutsche Bank has been “marked for death” by
“someone” or “someones” with the power and capital, to make it happen.
Even I am clueless to guess why Deutsche Bank is being specifically
targeted – which it most certainly is. Consequently, I am exploring all
potentialities – including even a grand conspiracy, as discussed in last
Friday’s must listen Emergency Podcast
with Bix Weir; or perhaps, a geopolitical battle for Western domination, as
suggested by Max Keiser. Whatever the reason, the fact remains
that Deutsche Bank is unquestionably on the verge of collapse, as exemplified
by exploding credit default swaps; and its stock closing yesterday at an
all-time low, down 50% year-to-date, and 91% from its 2007 high.
At this point, I’m not sure there’s much more to add than the reams I’ve
already published about my staunch belief that Deutsche Bank is not only
going down, but going down soon. And that when it does, it will be the
financial, political, and monetary equivalent of the 2004 Indian Ocean
tsunami – which killed 230,000 people in 14 countries, the vast majority
within a few minutes time.
On that happy note, let’s shift to the “Land of the Setting Sun” – whose
lunatic Central bankers, yet again, proved the thesis of my July 29th article,
that the “clueless
Bank of Japan exemplifies the awe-inspiring, irreversibly destructive power
of the printing press.”
Heading into the meeting, every manner of opinion was spewed from the
mainstream media about what a desperate BOJ might do, given that nearly four
years after Shinzo Abe took office; and 3½ years after his “two-year”
Abenomics plan commenced; Japan has accomplished nothing but
collapsing economic activity – and for “good measure,” a flat-lining stock
market, despite the BOJ purchasing nearly two thirds of the ETFs tracking the
Nikkei 225 average! This time, not only was Haruhiko Kuroda going to
unveil his latest hyperinflationary effort (FYI, despite a “plunging CPI,”
Tokyo’s cost of living is the same
as London’s); but the results of the “comprehensive review” of Abenomics,
as ordered at the BOJ’s July 29th meeting.
Foremost amongst “expectations” was the lunatic concept of a “Reverse
Operation Twist” – in which the BOJ would lower rates further into negative
territory, and shift its massive, $65 billion/month QE purchases (actually,
Japan calls it QQE, or “Quantitative and Qualitative Easing”) toward shorter
duration securities. The ludicrous “reasoning” was that a steeper yield
curve would somehow benefit pension plans and insurance companies; but for
the life of me, I fail to see how it would matter a whit, or how it could
possibly be “beneficial” to reduce purchases of ultra-long-term duration
bonds, causing massive capital losses to everyone that owns them. Most
importantly, themselves, as the BOJ owns 40% of all JGB’s, or Japanese
government bonds. Which is why, last week, I deemed such a proposal as
a Frankenstein-like experiment.
Unfortunately, the reality wasn’t far from the description – although in
true Central bank fashion, it was watered down with Fedspeak to avoid
shocking markets, by euphemistically deeming the strategy shift “QQE with
yield curve control.” In reality, it’s “new framework” of targeting the
10-year interest rate specifically – i.e., setting a de facto long-term cap
at 0% – is hard to discern from what it was doing all along, as the 10-year
JGB yield was -0.06% before the decision, and -0.03% afterwards.
Moreover, interest rates were maintained at -0.1% – although expectations are
that they’ll reduce this rate further in November; and QQE buying was
maintained at the aforementioned $65 billion/month. Frankly, the only
real change in standard operating procedure was to re-allocate half of the
monthly $5 billion of equity ETF purchases to the smaller Topix index, given
its ownership of the nation’s largest companies – i.e, the “the
ultimate end game of communism” – was becoming too large.
However, what the “markets” are supposedly focusing more on – which given
the fact that the Yen is higher than when the announcement was made, within
3% of its pre-Abenomics high, depicts yet another “failure on arrival” – is
the fact that Japan appears to have eliminated its long-standing 2%
“inflation target.” Yep, just like the Fed will validate later today –
given that the “core CPI” the Fed has supposedly been “targeting” has been
above 2% for the past ten months – Japan decided to “move its
inflation goalpost” as well.
In other words, it announced QE to infinity – in true Central-bank-speak,
describing this sea change in policy, by simply saying “the monetary base may
fluctuate to achieve yield curve control.” Which anyone with half a
brain knows is going on already, given that fiat currency, by definition, is
a Ponzi scheme that must grow exponentially larger to survive. Which
sadly, always ends in hyperinflation, as evidenced by a thousand fiat
currency failures throughout history, and not a single success.
To that end, as we shift to the Fed’s – potentially equally historic –
statement a few hours hence, keep in mind that Janet Yellen’s first official
act as Fed Chairman in February 2014 was to remove Bernanke’s 6.5%
“unemployment rate threshold” for raising rates, instituted when QE3 was
commenced in December 2012. Moreover, just last month, right before
Yellen’s, LOL, hawkish Jackson Hole speech, San Francisco Fed President John
Williams published an official white paper, proposing the Fed should also
remove its long-standing 2% inflation target (and institute negative interest
rates), just as the Bank of Japan did today!
Yes, the BOJ, with the help of its relentless ETF buying, was able to push
the Nikkei 2% higher today. However, as noted above, the Yen is higher
than before the decision was announced – having only fallen for a mere
hour before reversing, to its highest point of the day as I write at 8:15 AM
EST. In response, Kuroda desperately attempted to jawbone the Yen lower
at his post-decision press conference, by stating the BOJ “will not hesitate
to ease policy further,” and “the commitment to overshoot inflation is aimed
at boosting inflation expectations.” However, it’s clearly failing
miserably – as thus far, gold and silver have been the market’s best post-BOJ
performers. And FYI, gold priced in Yen, despite the Yen’s
recent surge, is just 13% from its all-time high.
Well, that’s enough for now – as I get ready for the MAIN EVENT that is
the Fed’s policy statement later today, at 2:00 PM EST – that is, if
Deutsche Bank’s stock doesn’t dramatically collapse first. To that
end, NEVER before have I seen a Central bank – i.e, the Fed – so badly pinned
down by its own rhetoric, in so strongly hinting of potential rate hikes this
past month, amidst collapsing economic data; a collapsing Hillary Clinton
campaign; and oh yeah, the collapsing stock price, to an all-time low,
of the world’s “most systematically dangerous bank.”
All I can say is, that if the extraordinary political, economic, and
monetary events taking place worldwide aren’t enough to cause you PROTECT
YOURSELF now, I don’t know what more needs to occur. And if your answer
is “I need to see it collapse first,” you may well find that protecting
yourself, is far more difficult, and costly, than you could have imagined.
To that end, if such action includes the purchase and/or storage of
Precious Metals – in the latter case, involving some of the bullion
industry’s most unique, value-added programs – please call Miles Franklin at
800-822-8080, and give us a chance to earn your business.
And as always, I can be reached via email
